UPS plans to cut 12,000 jobs, or around 2.4% of its workforce, amid flat demand. Three-fourths of the cuts will occur during the first half of the year and the job eliminations are likely to be permanent, executives said.
“It’s a change in the way we work,” chief financial officer Brian Newman said. “So as volume returns to the system, we don’t expect these jobs to come back. It’s changing the effective way we operate.”
Package volume was down 7.4% in the final quarter of last year, with revenue down 7.8% year-over-year. At the same time, labor costs increased following a deal between UPS and the Teamsters that saw some workers receiving raises of up to 55% over five years.
For 2024, the company expects revenue to hit between $92 billion and $94.5 billion, which falls short of analyst predictions. UPS also noted the U.S. small-package market is likely to see less than 1% growth this year.
